Boeing to increase 737 production to 47 per month

The Boeing Co. said Thursday that in 2017 it will increase the rate of 737 production in Renton to 47 single-aisle jets per month, more than 560 per year. The rate now is 38 jets per month, already an all-time high.

The rate increase will come just as the newest 737 model, the 737 MAX, enters service. Boeing will begin building the first MAX in 2015, and the first delivery is planned for the third quarter of 2017.

Beverly Wyse, Boeing’s 737 program vice president and general manager, said the move is aimed at meeting increased demand from airlines.

“Our employees and our suppliers have successfully increased the production rate to unmatched levels in the past three years,” said Wyse. “This increase will lay a solid foundation as we bridge into production on the 737 MAX.”

With the current order backlog filling up more than seven years of production, the rate boost will give airlines the opportunity to take delivery of airplanes sooner.

The Renton 737 assembly plant already plans to gear up from today’s rate of 38 single-aisle jets per month, or 456 jets per year, to 42 per month or 504 per year in the first half of next year.

Airbus Chief Executive Fabrice Bregier said recently he’ll hold steady at the current A320 production rate of 42 per month to ease pressure on the supply chain. Because Airbus assembly plants operate on a European 11-month work calendar, that’s 462 jets per year.

But Issaquah, Wash.-based aviation analyst Scott Hamilton of Leeham.net said he believes Airbus will match Boeing’s new rate.

“Once Boeing makes the move, I have no doubt Airbus will make the move as well,” he said.

In a fierce battle for single-aisle jet sales, Airbus has been steadily overtaking Boeing.

That’s clear in orders for the new versions of their single-aisle jet families featuring new fuel-efficient engines — the A320neo for Airbus and the 737 MAX for Boeing.

While Boeing has just over 1,600 firm orders for the MAX, Airbus has more than 2,400 for the neo. Airbus has also won very large A320 orders from airlines that had flown only 737s, including American Airlines, Lion Air and Norwegian Air.

“Airbus is dominating the single-aisle market now,” said Hamilton.

Attempting to stem that tide, Boeing announced earlier this week that the MAX will provide 14 percent better fuel efficiency than current 737s, an extra 1 percent above what was projected previously.

The gearing up of production is yet another move in the battle with Airbus. In recent years, Boeing has relentlessly squeezed more and more production out of the Renton plant.

At the beginning of 2008, Boeing was rolling out just 28 single-aisle planes per month. That means the planned rate in 2017 will represent a 68 percent increase in production within a decade.